By Wayne Barber
Environmental services and waste management provider US Ecology said Thursday that its operating and net incomes dropped in the second quarter, on a year-over-year basis, even as company-wide revenue spiked by nearly $4 million.
Revenue landed at $126.1 million for the quarter ended June 30, 2017, up from $122.4 million in the same three-month period last year.
Operating income came in at $15.9 million. compared to $17.1 million in the second quarter of 2016. Net income for the latest quarter was $5 million, or $0.23 per diluted share, compared to $8.9 million, or $0.41 per diluted share.
Adjusted earnings per share – which excludes foreign currency translation gains and losses, the gain on sale of divested businesses, the non-cash write-down of deferred financing fees, and business development expenses – was $0.38 per diluted share in the second quarter of this year, compared to $0.37 per diluted share for 2016.
The company reported increased revenue in its environmental services segment: $89.6 million for the second quarter of 2017, up from $82.8 million in 2016. “A 6% increase in treatment and disposal (“T&D”) revenue as well as a 15% increase in transportation revenue drove the improvement from the second quarter of 2016,” the company said in an earnings press release.
Overall earnings took a hit from wind damage to a treatment facility in March, according to the earnings presentation. Due to lost profit from the plant’s shutdown, management anticipates recovering $2.5 million to $3.5 million in business interruption proceeds through the remainder of 2017.
Based in Boise, Idaho, US Ecology operates a landfill for commercial and government low-level radioactive waste (LLRW) on the Energy Department’s Hanford Site near Richland, Wash. It can accept LLRW from 11 western states.
US Ecology has two key competitors in the LLRW disposal space – EnergySolutions and Waste Control Specialists, which recently gave up on their planned merger after losing anti-trust litigation brought by the Justice Department.
The company did not mention the court ruling in its earnings press release or conference call on Friday morning.
US Ecology is increasing its 2017 capital expenditures estimate from $37 million to $39 million, due to landfill and unplanned maintenance spending, the company said.
“We are in a new state of business environment right now,” Chairman and CEO Jeff Feeler said during the question and answer session with financial analysts. “As far as the underlying business, we’ve seen some really good growth” in waste management and other sectors, he added.
While anticipating improved financial results through the remainder of 2017, management stuck with its full-year adjusted earnings per share guidance of $1.69 to $1.93.
